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Stock Market News for Sep 5, 2019

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Major indexes ended in the green on Wednesday after the Fed’s Beige Book revealed that the U.S. economy expanded modestly through August-end. In addition, monetary easing by China to boost its slowing economy and the UK Parliament’s approval of a law to delay Brexit boosted investors’ sentiment.

The Dow Jones Industrial Average climbed 0.9% to close at 26,355.47 on Sep 4. The broader S&P 500 and Nasdaq Composite followed suit, rising 1.1% and 1.3% respectively. The former closed at 2,937.78 and the latter finished the day at 7,976.88. The fear-gauge CBOE Volatility Index (VIX) slumped 11.9% to close at 17.33 on Wednesday. Finally, advancers outnumbered decliners on the NYSE by a 4.17-to-1 ratio.

Fed’s Biege Book Points to a Decent U.S. Economy

On Sep 4, the closely followed Fed’s Beige Book disclosed U.S. economy’s decent pace through the end of August. It noted that most businesses had an optimistic near-term outlook despite the ongoing U.S.-China trade war. Auto sales rose modestly in most districts although transportation activity declined due to lower global demand and rise in trade tensions.

Reports on consumer spending remained mixed. Tourism activity remained firm in most districts. Home sales were limited due to low inventory levels and average new home construction activity. Commercial real estate construction and sales activity remained sound and the pace of leasing rose as well.

It was noted that manufacturing activity was lower than the previous report. Agricultural conditions were weak too, primarily due to adverse weather conditions, low prices of commodities and uncertainties related to trade dispute. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

China Takes Further Steps to Fuel its Economy

China’s cabinet signaled a series of steps to lift the Asian country’s slowing economy. The cabinet indicated that a decline in the amount of funds that banks have to hold in reserve was underway. It also stressed upon lowering “faster” the real borrowing cost for businesses.

The State Council on Sep 4, following an executive meeting chaired by Premier Li Keqiang, called for using tools such as broad and targeted reserve-ratio cuts to cushion the country’s economy.

UK’s Attempt for an Orderly Exit from EU

United Kingdom’s parliament, late on Sep 3, took steps to prevent a no-deal exit from EU. First, the House of Commons rejected UK Prime Minister Boris Johnson’s call for a snap election. The Labor opposition won’t support it until a bill that blocks a no-deal Brexit is passed. The bill, which requests EU for a three-month delay in order to figure out a Brexit deal, is expected to move through the House of Lords by Sep 6.

Economic News

U.S. trade deficit lowered by 3%, thanks to increase in exports of drugs, autos and oil. The deficit declined from a revised $55.5 billion in June to $54 billion in July. July’s exports were $207.4 billion, which were $1.2 billion more than exports in the month before.

Stocks that Made Headlines

Stryker's Mobius Imaging Buyout to Boost Its Spine Division

Stryker Corporation (SYK - Free Report) recently announced an agreement to acquire Mobius Imaging for a deal value of $370 million upfront and up to $130 million of contingent payments. (Read more)

Equinor's $5B Buyback to be Aided by Johan Sverdrup Output

Equinor ASA (EQNR - Free Report) recently announced a share repurchase program valued at $5 billion. (Read more)

It’s Illegal in 42 States, But Investors Will Make Billions Legally

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That’s twice as much as they spend on marijuana, legally or otherwise.

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Stryker Corporation (SYK) - free report >>

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